Concord’s tax rate decreased for 2021, but that doesn’t mean homeowners will be paying less taxes this year as property values across the city have gone up.
The city has released new tax rates and updated property assessments in the last several days and will soon be sending out tax bills that are due in January and March. The overall value of assessed property across the city rose 10% this year. As a result, the property tax rate will be lower this year than in 2020.
The state calculates tax rates for municipalities using the total value of assessed property divided by expenses. The total rate is made up of city, school, county and state taxes.
In Concord, the total tax rate for 2021 is $25.12 per $1,000 of assessed value, a decrease of $1.64 from last year. Penacook’s rate is $27.97 per $1,000, down $1.96 from 2020.
This year’s valuation of the city’s taxable land is about $5.1 billion, an increase from last year’s valuation of $4.6 billion. This year’s assessed valuation for Penacook was $488 million.
As anyone trying to buy a house in the last year knows, beginning in April 2020, demand for residential properties has shot up while fewer homes have been available to buy. Low interest rates have also contributed to surging home prices.
Concord was named by Realtor.com as the second hottest housing market in April 2021, based on the number of viewers per property and how long a listing stayed active. This April, the median length of time a listing was active in Concord was 15 days, compared to 52 days in April 2020.
Meanwhile, values for commercial and office properties in Concord have stayed the same or declined slightly, according to a presentation from the city’s Assessing Department.
To roughly gauge how property taxes have changed over the past 10 years, the Monitor chose two random addresses from each of the 15 neighborhoods the assessing office uses to divide the city. Seven of those homes saw some kind of new building or alteration since 2011, which could play a role in increasing tax liability.
Among all 30 addresses, there was an average increase of 52.5% in the amount paid to the city in property taxes since 2011, despite only a 2% increase in the Concord tax rate and a 4.5% increase in the Penacook tax rate. Removing the homes where improvements were recorded drops the average increase to 49.5%.
Ten years ago, the median property tax bill among the properties selected was about $4,700. By 2016, the median bill was about $5,700. This year, with the most recent tax assessment and rates for 2021, the median tax bill for those same houses would be about $7,000.
Two tax bills have already gone out this year, due in July and October. However, those bill amounts were estimated based on an earlier valuation and old tax rate. Taxpayers will need to subtract what they have already paid from the newly calculated 2021 yearly amount, then split that number in half to find out the amount for each of the remaining two bills.
The city has an online tax rate calculator to estimate the payment owed on the final two bills, due Jan. 2 and March 31. New assessment values can be viewed online or at the Assessing Office at City Hall. The department also has a presentation created in 2019 that explains the tax bill in greater detail.
City staff in the Assessing Department are responsible for valuing property, issuing warrants for tax collection and reviewing appeals. A three-member Board of Assessors appointed by the city manager signs tax warrants and decides whether to grant or deny an appeal.
While all New Hampshire municipalities are required by law to update valuations at least every five years, Concord adjusts property assessments annually, based on market values on April 1. Concord Director of Real Estate Assessments Kathryn Temchack said annual revaluations help avoid residents seeing a sudden spike in their tax bills.
Annual updates do not mean that assessors inspect every home each year. To update valuations, assessment staff will research and analyze sales in the last 18 months up to April of that year to find the market value of a given property. Market value is what “a willing buyer” will pay “a willing seller” under normal circumstances, i.e. not a foreclosure or a family transaction.
Trends in the real estate market, neighborhood changes, land use and zoning changes, adjustments to the property line and building permits can all impact valuation.
Broad market changes affect neighborhoods differently, Temchack said, much like the ocean along a beach. “When the tide hits the shore, it’s not a straight line,” she said. Which areas are more desirable can shift over time, and updated assessments work to “reshuffle the deck,” Temchack said.
Staff use a series of ratios and formulas to help ensure that assessed values are not too far from market values or from other values across city. A detailed video from 2020 on the tax assessment process is available on the assessing website and the City of Concord YouTube channel.